Manchester United plc 2013 Second Quarter Results07:00 EST Thursday, February 14, 2013 MANCHESTER, England (Business Wire) -- Manchester United (NYSE: MANU; “the Company” and “the Group”) – one of the most popular and successful sports teams in the world - today announced financial results for the three and six month periods ended 31 December 2012. Highlights Increased second quarter commercial revenue 29.0% year on year.Completed the strategic acquisition of BskyB's one-third stake in MUTV, taking full control of our global television channel. Executed an additional six new Sponsorship deals – Kansai and Singha (global; headquartered in Japan/South Africa and Thailand), Wahaha and Multistrada (regional; China and Indonesia respectively); and China Construction Bank and Denizbank (financial services; China and Turkey respectively). Premier League Clubs agreed to a system of enhanced financial regulations – The new regulations include a short-term cost control protocol, which would limit the amount by which clubs could raise their player costs. Finalised 2013 summer tour which includes games in Australia, Japan, and Hong Kong. Commentary Ed Woodward, Executive Vice Chairman commented, ‘Manchester United achieved record revenue and record adjusted EBITDA in the second quarter driven by our commercial operation, which continues to experience extremely strong growth particularly in sponsorship. In addition, our acquisition of BskyB's one third stake in Manchester United's global television channel MUTV will be key in expanding our media business in the future'. Outlook For fiscal 2013, Manchester United continues to expect: Revenue to be £350m to £360m. Adjusted EBITDA to be £107m to £110m.     Key Financials (unaudited)                                 £ million     Three months ended31 December           Six months ended31 December           2012   2011   Change       2012   2011   Change Commercial revenue     35.6   27.6   29.0%       78.6   62.2   26.4% Broadcasting revenue     39.5   37.7   4.8%       53.2   59.6   (10.7%) Matchday revenue     35.0   36.0   (2.8%)       54.6   53.3   2.4% Total revenue     110.1   101.3   8.7%       186.4   175.1   6.5% Adjusted EBITDA*     50.2   44.9   11.8%       66.5   64.2   3.6%                                 Profit on ordinary activities before Tax     28.4   19.2   47.9%       22.3   12.8   74.2% Tax (expense)/credit     (12.2)   22.9   -       14.4   24.3   (40.7%)                                 Profit for the period from continuing operations (i.e. Net Income)     16.2   42.1   (61.5%)       36.7   37.1   (1.1%) Basic and diluted earnings per share (EPS)**     0.10   0.27   (63.0%)       0.23   0.24   (4.2%) Gross debt***     366.6   438.9   (16.5%)       366.6   438.9   (16.5%) Cash and cash equivalents     66.6   50.9   30.8%       66.6   50.9   30.8%                   * Adjusted EBITDA is a non-IFRS measure. We define Adjusted EBITDA as profit/(loss) for the period from continuing operations before net finance costs, tax credit/(expense), depreciation, amortisation of, and profit on disposal of, players' registrations and exceptional items. We believe Adjusted EBITDA is useful as a measure of comparative operating performance from period to period and among companies as it is reflective of changes in pricing decisions, cost controls and other factors that affect operating performance, and it removes the effect of our capital structure (primarily interest expense and exchange rate gains or losses), asset base (primarily depreciation and amortisation) and items outside the control of our management (primarily income taxes and interest income and expense). Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for an analysis of our results as reported under IFRS as issued by the IASB. A reconciliation of Adjusted EBITDA to profit/(loss) for the period from continuing operations is presented in supplemental note 4. ** See supplemental note 2. *** Gross debt has decreased by 16.1% since 30 June 2012 (£436.9 million).   Revenue Analysis Commercial Commercial revenue for the second quarter increased 29.0% year on year to £35.6 million driven by the addition of several new sponsorship deals. For the second quarter: Sponsorship revenue increased 48.6% to £20.8 million; Retail, Merchandising, Apparel & Product Licensing increased 13.1% to £9.5 million; and New Media & Mobile increased 1.9% to £5.3 million. We have secured a new eight year sponsorship agreement for our training kit rights; and will be making an announcement with further details in the near future. Broadcasting Broadcasting revenues for the second quarter increased 4.8% year on year to £39.5 million. The main reason for this increase relates to one extra Champions League game being played and two additional live Premier League TV appearances compared to the same period last year. Matchday Matchday revenues for the second quarter decreased 2.8% year on year to £35.0 million, due mainly to one less domestic cup home game being played in the period. Other Financial Information Operating expenses Total operating expenses for the second quarter increased 4.6% year on year to £73.2 million. Staff costs Staff costs for the second quarter increased 14.2% year on year to £44.2 million, primarily due to new player signings, player wage increases and growth in commercial headcount. The six months year to date increase is 10.5% year on year to £84.5 million. Other operating expenses Other operating expenses for the second quarter decreased 11.3% year on year to £15.7 million, primary due to a reduction in gateshare costs relating to the one less domestic cup home game compared with the same period last year. Depreciation & amortisation of players' registrations Depreciation for the second quarter increased 5.9% year on year to £1.8 million, from £1.7 million in the prior period; and amortisation of players' registrations for the quarter increased 8.1% year on year to £10.7 million. The unamortised balance of existing players' registrations at 31 December 2012 was £125.9 million. Exceptional items Exceptional items for the second quarter were £0.8 million and related to professional adviser fees in connection with the IPO compared with £2.0 million in the prior year quarter. Profit on disposal of players' registrations Profit on the disposal of players' registrations for the second quarter was £0.7 million due to additional conditional payments being received for players sold in prior periods. Net finance costs Net finance costs for the second quarter decreased 25.2% year on year to £9.2 million. The decline was driven by the re-purchase and retirement of the sterling equivalent of £62.6 million of senior secured notes comprising US$101.7 million of US dollar denominated notes and a favourable foreign exchange movement of £2.3 million year on year on translation of the US dollar denominated senior secured notes. These foreign exchange gains or losses are not a cash benefit or charge and could reverse depending on dollar/sterling exchange rate movements. Any gain or loss on a cumulative basis will not be realised until 2017 (or earlier if our senior secured notes are refinanced or redeemed prior to their stated maturity). Tax The Group recorded a non-cash tax charge for the second quarter of £12.2 million, which primarily reflects the utilisation of a portion of the deferred tax asset recognised in the first quarter of fiscal 2013. In the prior year period, the Group recorded a tax credit of £22.9 million due primarily to the recognition of a deferred tax asset relating to pre-existing UK losses. The effective tax rate for the quarter is 42.8%, which is higher than the US statutory tax rate of 35%, due to a current mismatch in the recognition of the UK and US deferred tax assets and liabilities. It should be noted that these are all non-cash tax charges. Profit for the period from continuing operations Profit from continuing operations for the second quarter decreased to £16.2 million, compared with a profit of £42.1 million in the prior year quarter. Earnings per share for the second quarter decreased to £0.10, compared with £0.27 in the prior year quarter. This decrease is largely due to a tax credit of £22.9 million realised in the prior year quarter, compared to a tax charge of £12.2 million in this year's second quarter. Cash flows Cash generated from operating activities for the second quarter was £25.4 million, an increase of £31.7 million compared to £6.3 million cash used in the prior year quarter. Capital expenditures on property, plant and equipment and investment property for the second quarter were £5.9 million, an increase of £4.3 million compared to £1.6 million in the prior year quarter mainly due to the continuing redevelopment of the Carrington training facility. Net player capital expenditure for the second quarter was £2.4 million, an increase of £1.5 million compared to £0.8 million in the prior year quarter due mainly to conditional payments being made on players acquired in prior periods. Net cash used in financing activities for the second quarter was £1.6 million, a decrease of £3.7 million compared to £5.3 million in the prior year quarter. The current year quarter includes expenses of £1.5 million directly attributable to the issue of new shares. The prior year quarter includes £5.3 million relating to the repurchase of senior secured notes. Cash and cash equivalents Cash and cash equivalents at 31 December 2012 were £66.6 million compared to £50.9 million at 31 December 2011. Borrowings Total borrowings were £366.6 million at 31 December 2012 compared to £439.0 million at 31 December 2011. During the six months we re-purchased and retired the sterling equivalent of £62.6 million of senior secured notes comprising US$101.7 million of US dollar denominated notes. The consideration paid amounted to £67.9 million. Conference Call Information The Company's conference call to review the second quarter and six months fiscal 2013 results will be broadcast live over the internet today, 14 February 2013 at 08:00 am Eastern Time and will be available on Manchester United's investor relations website at http://ir.manutd.com. Thereafter, a replay of the webcast will be available for thirty days. About Manchester United Manchester United is one of the most popular and successful sports teams in the world, playing one of the most popular spectator sports on Earth. Through our 135 year heritage we have won 60 trophies, enabling us to develop the world's leading sports brand and a global community of 659 million followers. Our large, passionate community provides Manchester United with a worldwide platform to generate significant revenue from multiple sources, including sponsorship, merchandising, product licensing, new media & mobile, broadcasting and matchday. Cautionary Statement This press release contains forward-looking statements. You should not place undue reliance on such statements because they are subject to numerous risks and uncertainties relating to the Company's operations and business environment, all of which are difficult to predict and many are beyond the Company's control. Forward-looking statements include information concerning the Company's possible or assumed future results of operations, including descriptions of its business strategy. These statements often include words such as “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “seek,” “believe,” “estimate,” “predict,” “potential,” “continue,” “contemplate,” “possible” or similar expressions. The forward-looking statements contained in this press release are based on our current expectations and estimates of future events and trends, which affect or may affect our businesses and operations. You should understand that these statements are not guarantees of performance or results. They involve known and unknown risks, uncertainties and assumptions. Although the Company believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect its actual financial results or results of operations and could cause actual results to differ materially from those in these forward-looking statements. These factors are more fully discussed in the “Risk Factors” section and elsewhere in the Company's Registration Statement on Form F-1, as amended (File No. 333-182535) and the Company's Annual Report on Form 20-F (File No. 001-35627).     Key Performance Indicators                                     Three months ended     Six months ended             31 December     31 December               2012   2011     2012   2011 Commercial % of total revenue             32.3%   27.3%     42.2%   35.5% Nike and Aon % of Commercial             40.2%   47.8%     36.3%   42.4% Partners and other % of Commercial             59.8%   52.2%     63.7%   57.6% Broadcasting % of total revenue             35.9%   37.2%     28.5%   34.0% Matchday % of total revenue             31.8%   35.5%     29.3%   30.5% Home Matches Played                             FAPL   7   7     10   10 UEFA competitions             2   2     3   3 Domestic Cups             -   1     1   1 Away Matches Played                             UEFA competitions             3   2     3   3 Domestic Cups             1   1     1   2   Other                             Employees at period end             779   696     779   696 Staff costs % of revenue             40.1%   38.2%     45.3%   43.7%                         Phasing of Premier League home games   Quarter 1   Quarter 2   Quarter 3   Quarter 4   Total   2012/13 season*   3   7   5   4   19   2011/12 season   3   7   5   4   19   *Note -Games can be rescheduled for TV or clashes due to domestic cup competitions and will be updated each Quarter accordingly.     CONSOLIDATED INCOME STATEMENT(unaudited; in £ thousands, except per share data)               Three months ended31 DecemberSix months ended31 December                   2012       2011         2012       2011   Revenue110,056 101,278 186,372 175,060 Operating expenses (73,169) (70,031 ) (147,980) (136,457 ) Profit on disposal of players' registrations         687       206         5,505       5,830   Operating profit         37,574       31,453         43,897       44,433   Finance costs (9,277) (12,443 ) (21,753) (32,062 ) Finance income         67       194         156       478   Net finance costs         (9,210)     (12,249 )       (21,597)     (31,584 ) Profit on ordinary activities before tax28,364 19,204 22,300 12,849 Tax (expense)/credit         (12,146)     22,867         14,386       24,252   Profit for the period from continuing operations(1)         16,218       42,071         36,686       37,101   Attributable to: Owners of the Company 16,131 41,967 36,517 36,949 Non-controlling interest         87       104         169       152             16,218       42,071         36,686       37,101     Earnings per share attributable to the equity holders of the Company during the year Basic and diluted earnings per share (Pounds Sterling) 0.10 0.27(2)   0.23 0.24(2)   Weighted-average shares outstanding (Thousands) 163,826 155,352 161,980 155,352   (1) Also referred to as Net Income.   (2) As adjusted retrospectively to reflect the reorganisation transactions described in supplemental note 1.     CONSOLIDATED BALANCE SHEET(unaudited; in £ thousands)                                 31 December2012         30 June 2012       31 December 2011 ASSETSNon-current assets Property, plant and equipment 253,609 247,866 244,537 Investment property 14,140 14,197 14,245 Goodwill 421,453 421,453 421,453 Players' registrations 125,945 112,399 109,864 Trade and other receivables 1,500 3,000 13,000 Non-current tax receivable - - 2,500 Deferred tax asset         15,481         -       -           832,128         798,915       805,599 Current assets Derivative financial instruments 161 967 239 Trade and other receivables 61,970 74,163 47,484 Current tax receivable 2,500 2,500 - Cash and cash equivalents         66,631         70,603       50,900           131,262         148,233       98,623 Total assets         963,390         947,148       904,222     CONSOLIDATED BALANCE SHEET (continued)(unaudited; in £ thousands)                                 31 December2012         30 June 2012(1)       31 December 2011(1)EQUITY AND LIABILITIESEquity Share capital 52 50 50 Share premium 68,822 25 25 Merger reserve 249,030 249,030 249,030 Hedging reserve 1 666 - Retained earnings/(deficit)         24,323           (12,671 )       11,233   Equity attributable to owners of the Company342,228 237,100 260,338 Non-controlling interests         (1,834)         (2,003 )       (2,178 )           340,394           235,097         258,160   Non-current liabilities Derivative financial instruments 1,629 1,685 - Trade and other payables 21,086 22,305 21,011 Borrowings 349,005 421,247 422,802 Deferred revenue 4,888 9,375 13,862 Provisions 1,158 1,378 1,644 Deferred tax liabilities         28,161           26,678         30,319             405,927           482,668         489,638   Current liabilities Derivative financial instruments 60 - 1,734 Current tax liabilities 1,128 1,128 1,127 Trade and other payables 66,106 83,664 47,122 Borrowings 17,625 15,628 16,148 Deferred revenue 131,712 128,535 89,860 Provisions         438           428         433             217,069           229,383         156,424   Total equity and liabilities         963,390           947,148         904,222   (1) As adjusted retrospectively to reflect the reorganisation transactions described in supplemental note 1.     CONSOLIDATED STATEMENT OF CHANGES IN EQUITY(unaudited; in £ thousands)                         Sharecapital   Sharepremium   Mergerreserve   Hedgingreserve   Retainedearnings/(deficit)   Totalattributableto owners of the Company   Non-controllinginterests   Total equityBalance at 1 July 2011     -   249,105     -   (466 )   (25,886 )   222,753     (2,330 )   220,423   Profit for the period - - - - 36,949 36,949 152 37,101 Cash flow hedges, net of tax - - - 466 - 466 - 466 Currency translation differences     -   -     -   -     170     170     -     170   Total comprehensive income for the period - - - 466 37,119 37,585 152 37,737 Proceeds from shares issued 50 25 - - - 75 - 75 Capital reorganisation(1)     -   (249,105 )   249,030   -     -     (75 )   -     (75 ) Balance at 31 December 2011     50   25     249,030   -     11,233     260,338     (2,178 )   258,160   (Loss)/profit for the period - - - - (13,963 ) (13,963 ) 175 (13,788 ) Cash flow hedges, net of tax - - - 666 - 666 - 666 Currency translation differences     -   -     -   -     59     59     -     59   Total comprehensive income/(loss) for the period - - - 666 (13,904 ) (13,238 ) 175 (13,063 ) Dividends     -   -     -   -     (10,000 )   (10,000 )   -     (10,000 ) Balance at 30 June 2012     50   25     249,030   666     (12,671 )   237,100     (2,003 )   235,097   Profit for the period - - - - 36,517 36,517 169 36,686 Cash flow hedges, net of tax - - - (665 ) - (665 ) - (665 ) Currency translation differences     -   -     -   -     (4 )   (4 )   -     (4 ) Total comprehensive income for the period - - - (665 ) 36,513 35,848 169 36,017 Equity settled share-based payments - - - - 481 481 - 481 Proceeds from shares issued(2)     2   68,797     -   -     -     68,799     -     68,799   Balance at 31 December 2012     52   68,822     249,030   1     24,323     342,228     (1,834)   340,394     (1) Adjusted retrospectively to reflect the reorganisation transactions described in supplemental note 1.   (2) See supplemental note 1.2.     CONSOLIDATED STATEMENT OF CASH FLOWS(unaudited; in £ thousands)             Three months ended31 DecemberSix months ended31 December             2012   2011       2012   2011 Cash flows from operating activities Cash generated from/(used in) operations (supplemental note 3) 27,980 (2,726 ) 61,863 19,834 Interest paid (3,431) (3,828 ) (27,934) (24,952 ) Interest received 72 233 157 379 Income tax received/(paid)       802     -         600     (3,210 ) Net cash generated from/(used in) operating activities       25,423     (6,321 )       34,686     (7,949 ) Cash flows from investing activities Purchases of property, plant and equipment (5,942) (1,630 ) (9,338) (8,041 ) Purchases of investment property - - - (7,364 ) Purchases of players' registrations (3,361) (1,255 ) (38,258) (52,289 ) Proceeds from sale of players' registrations       999     407         6,363     4,373   Net cash used in investing activities       (8,304)   (2,478 )       (41,233)   (63,321 ) Cash flows from financing activities Proceeds from issue of shares (see supplemental note 1.2) (1,459) - 68,799 - Repayment of other borrowings       (92)   (5,251 )       (62,796)   (28,377 ) Net cash (used in)/generated from financing activities       (1,551)   (5,251 )       6,003     (28,377 ) Net increase/(decrease) in cash and cash equivalents15,568 (14,050 ) (544) (99,647 ) Cash and cash equivalents at beginning of period 52,527 64,967 70,603 150,645 Exchange losses on cash and cash equivalents       (1,464)   (17 )       (3,428)   (98 ) Cash and cash equivalents at end of period       66,631     50,900         66,631     50,900       SUPPLEMENTAL NOTES1General information Manchester United plc (“the Company”) and its subsidiaries (together “the Group”) is a professional football club together with related and ancillary activities. The Company is incorporated under the Companies Law (2011 Revision) of the Cayman Islands. The Company became the parent of the Group as a result of reorganisation transactions which were completed immediately prior to the completion of the public offering of Manchester United plc shares on the New York Stock Exchange (“NYSE”) in August 2012 as described more fully below. 1.1The reorganisation transactions The Group had historically conducted business through Red Football Shareholder Limited, a private limited company incorporated in England and Wales, and its subsidiaries. Prior to the reorganisation transactions, Red Football Shareholder Limited was a direct, wholly owned subsidiary of Red Football LLC, a Delaware limited liability company. On 30 April 2012, Red Football LLC formed a wholly-owned subsidiary, Manchester United Ltd., an exempted company with limited liability incorporated under the Companies Law (2011 Revision) of the Cayman Islands, as amended and restated from time to time. On 8 August 2012, Manchester United Ltd. changed its legal name to Manchester United plc. On 9 August 2012, Red Football LLC contributed all of the equity interest of Red Football Shareholder Limited to Manchester United plc. As a result of these reorganisation transactions, Red Football Shareholder Limited became an indirect, wholly-owned subsidiary of Manchester United plc. The new parent, Manchester United plc. had 155,352,366 shares in issue immediately after the reorganisation transactions and before the issue of new shares pursuant to the public offering. The reorganisation transactions have been treated as a capital reorganisation arising at the reorganisation date (9 August 2012). In accordance with International Financial Reporting Standards, historic earnings per share calculations and the balance sheet as at 30 June 2012 and 31 December 2011 reflect the capital structure of the new parent rather than that of the former parent, Red Football Shareholder Limited. 1.2Initial public offering (“IPO”) On 10 August 2012, the Company issued a further 8,333,334 ordinary shares at an issue price of $14 per share and listed such shares on the NYSE. Net of underwriting costs and discounts, proceeds of $110,250,000 (£70,258,000) were received. Expenses of £1,459,000 directly attributable to this issue of new shares have been offset against share premium. 2Earnings per share Basic and diluted earnings per share is calculated by dividing the profit attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares in issue during the period, as adjusted for the reorganisation transactions described in note 1.1. The Company did not have any dilutive shares during the period (2011: none).       Unauditedthree months ended31 December     Unauditedsix months ended31 December             2012   2011       2012   2011   Profit attributable to equity holders of the Company (£'000) 16,131 41,967 36,517 36,949 Weighted average Class A ordinary shares (thousands) 39,826 31,352 (1)37,980 31,352 (1) Weighted average Class B ordinary shares (thousands) 124,000 124,000 (1)124,000 124,000 (1) Basic earnings per share (Pounds Sterling) 0.10 0.27 (1)0.23 0.24 (1) Diluted earnings per share (Pounds Sterling)       0.10   0.27 (1)     0.23   0.24 (1)   (1) As adjusted retrospectively to reflect the reorganisation transactions described in note 1.1.   On 15 August 2012, the Company issued a further 139,895 Class A ordinary shares pursuant to the Company's 2012 Equity Incentive Award Plan and listed such shares on the NYSE. The number of shares in issue as of 31 December 2012 was 163,825,595 shares comprising 39,825,595 Class A ordinary shares and 124,000,000 Class B ordinary shares 3Cash generated from operations         Three months ended31 December       Six months ended31 December           2012£'000     2011 £'000       2012£'000   2011 £'000 Profit from continuing operations 16,218     42,071 36,686   37,101 Tax expense/(credit)         12,146       (22,867 )       (14,386)   (24,252 ) Profit on ordinary activities before tax 28,364 19,204 22,300 12,849 Depreciation charges 1,852 1,721 3,769 3,560 Amortisation of players' registrations 10,660 9,926 20,483 20,020 Profit on disposal of players' registrations (687) (206 ) (5,505) (5,830 ) Net finance costs 9,210 12,249 21,597 31,584 Share-based payments 154 - 481 - Fair value losses/(gains) on derivative financial instruments 102 (240 ) (9) (240 ) Decrease in trade and other receivables 8,369 8,136 14,727 7,471 Decrease in trade and other payables and deferred revenue (29,954) (53,283 ) (15,744) (49,145 ) Decrease in provisions         (90)     (233 )       (236)   (435 ) Cash generated from/(used in) operations         27,980       (2,726 )       61,863     19,834     4Reconciliation of Adjusted EBITDA to profit for the period from continuing operations         Three months ended31 December       Six months ended31 December           2012£'000     2011 £'000       2012£'000   2011 £'000 Adjusted EBITDA50,180     44,920 66,523   64,209 Adjustments: Depreciation (1,852) (1,721 ) (3,769) (3,560 ) Amortisation of players' registrations (10,660) (9,926 ) (20,483) (20,020 ) Exceptional items (781) (2,026 ) (3,879) (2,026 ) Profit on disposal of players' registrations 687 206 5,505 5,830 Net finance costs (9,210) (12,249 ) (21,597) (31,584 ) Tax (expense)/credit         (12,146)     22,867         14,386     24,252   Profit for the period from continuing operations         16,218       42,071         36,686     37,101     ICRInvestor Relations:Brendon Frey / Rachel Schacter, +1 203-682-8200ir@manutd.co.ukorMedia:Manchester United plcPhilip Townsend, +44 161 868 8148philip.townsend@manutd.co.ukorSard Verbinnen & CoJim Barron / Michael Henson, +1 212-687-8080